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VTI vs. VOO: Background
VTI and VOO are two of the largest exchange-traded funds on the market by assets under management.
VTI is the ticker symbol for the Vanguard Total Stock market Index Fund ETF, and VOO is the ticker symbol for the Vanguard 500 Index Fund ETF.
Both are low-cost ETFs that provide exposure to a basket of U.S. stocks. So what is the difference between VTI and VOO?
VTI vs. VOO: The Difference
The primary difference between VTI and VOO is the index that each fund tracks. All of the disparities between VTI and VOO are downstream of this difference.
VTI tracks the performance of the CRSP U.S. Total Market Index, while VOO tracks the performance of the S&P 500 Index.
VOO’s index consists of 500large-cap domestic stocks; they are the largest companies in the U.S. stock market.
Generally speaking, VTI is more diversified than VOO because it invests in a wider variety of equities.
VTI provides some exposure to small- and mid-cap stocks, albeit small – around 12% of the total assets in VTI are invested in small- and mid-caps – whereas VOO has an allocation of 0% by definition.
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VTI vs. VOO: The Similarities
VTI and VOO are more alike than they are different, so it may be inefficient to own both of them.
Their top ten holdings are the same – they only differ by allocation percentages, but they are similar even then.
Here is a side-by-side comparison of the top holdings in VTI and VOO:
|Apple (AAPL) 5.93%||Apple (AAPL) 7.04%|
|Microsoft (MSFT) 5.06%||Microsoft (MSFT) 6.01%|
|Alphabet (GOOG, GOOGL) 3.47%||Alphabet (GOOG, GOOGL) 4.19%|
|Amazon.com (AMZN) 3.09%||Amazon.com (AMZN) 3.71%|
|Tesla (TSLA) 1.95%||Tesla (TSLA) 2.35%|
|NVIDIA (NVDA) 1.42%||NVIDIA (NVDA) 1.77%|
|Berkshire Hathaway (BRK.B) 1.31%||Berkshire Hathaway (BRK.B) 1.68%|
|Meta Platforms (FB) 1.12%||Meta Platforms (FB) 1.34%|
|UnitedHealth Group (UNH) 1.05%||UnitedHealth Group (UNH) 1.25%|
|Johnson & Johnson (JNJ) 1.02%||Johnson & Johnson (JNJ) 1.21%|
|% of Assets in Top Ten Holdings: 24.40%||% of Assets in Top Ten Holdings: 29.34%|
Big Tech has become most of the market, a reality reflected in both of these broad-based funds.
Additionally, VTI and VOO charge the same expense ratio: 0.03%. Essentially, this is as low as a fee can get for an exchange-traded fund.
Both funds payout a similar dividend yield, too. VTI distributes 1.19% of its share price annually, and VOO pays out 1.24%.
Which is Better?
The answer to “which is better: VTI or VOO?” ultimately depends on your investing goals, risk tolerance, existing portfolio, and several other factors.
There is not a single, definitive answer to this question. Instead, several conditional answers may or may apply to your unique situation.
Let’s look at a few preferences that would make VOO more appropriate than VTI:
- VOO is better than VTI if you’re exclusively seeking exposure to the S&P 500 Index
- VOO is better than VTI if you want to be more concentrated in Big Tech / FAAMG
- VOO is better than VTI if you want your portfolio to be more correlated to the “market.”
And now, when VTI might be preferred to VOO:
- VTI is better than VOO if you want some exposure to small- and mid-cap stocks
- VTI is better than VOO if you want to be less concentrated in any one equity
- VTI is better than VOO if you want exposure to 4000+ stocks in a single fund
Contrary to what we advised earlier, the best strategy for some investors might be to own both VTI and VOO.
If choosing between these two funds keeps you up at night, consider owning both and possibly reaching out to a financial advisor.
VTI vs. VOO: Frequently Asked Questions
Is VTI better than VOO?
VTI is better than VOO if you want an ETF with some exposure to small- and mid-cap equities. VOO exclusively invests in large-cap U.S. stocks in the S&P 500 Index.
Can I buy both VOO and VTI?
Yes, you can buy both VOO and VTI, but it may be redundant given the similarities between each fund. For example, their top ten holdings are the same. If you’re seeking diversification, consider adding some international exposure in conjunction with VOO (or VTI) instead of owning VOO and VTI.
Is VTI and VOO redundant?
VTI and VOO may be too redundant to own in the same portfolio. While their fees are very low, they have a similar group of top holdings, dividend yield, and historic performance.
Is VOO or VOOG better?
VOO is better than VOOG if you’re seeking exposure to value and growth stocks in the S&P 500, and VOOG is better than VOO if you exclusively want exposure to growth stocks in the S&P 500.
Is VGT better than VOO?
Bottom Line: VTI vs. VOO
Hopefully, you’re now better equipped to decide between VTI vs. VOO.
Both are quite effective at what they’re designed to do: provide low-cost, frictionless exposure to the U.S. stock market.
This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we researched VTI vs. VOO.